Posts tagged with: solar power

While photovoltaic generated electricity remains politically controversial in some parts of the world, for Tokelau, it will provide a cost-effective and environmentally sound solution for the entire territory in the coming months.

Tokelau comprises three atolls in the South Pacific. Photovoltaic arrays have currently been installed on one island, and the installation of another two systems are scheduled to be complete by this October. Overall, 4,032 modules, 392 inverters and 1,344 batteries will provide electricity supply for the island. The first system on the atoll Fakaofo will be switched on in two weeks.

New Zealand solar company, Powersmart is supplying and installing the project. Due to the island locations of the installations, they will have to be able to withstand cyclone force winds up to 230 km/h.

Previously Tokelau relied entirely on expensive diesel to provide electricity between 15 and 18 hours a day. The territory has a population of 1,500 people across a combined land area of 10 square kilometers. Around 200 liters of fuel were previously burned for electricity daily. This required around 2,000 barrels to be shipped from New Zealand at a cost of NZD1 million (US$810,000) a year.

Powersmart director, Mike Bassett-Smith said the solution on Tokelau can be an example across the South Pacific. “Energy costs underpin the economic and social development of these nations and making a positive impact on these issues is the single most important reason we started this business.”

The company claims the project is the largest off-grid solar power project in the world and the largest solar system in the South Pacific. Coconut-oil fired generators will provide backup capacity for cloudy days.

The Tokelau project has come at a cost of NZD7.5 million (US$6.11 million) and was funded by the New Zealand Ministry of Foreign Affairs and Trade. Even at today’s diesel prices, the array will have paid for itself in less than a decade.

The change is being welcomed by the Tokelauan community. “It’s going to be an amazing change from using fossil fuel,” says Foua Toloa. “It avoids expenses, but also bringing them there, it’s dangerous and any spill will affect the environment.”

After testing is complete on Fakaofo, work will commence on the remaining atolls of Atafu and Nukunon.

More than 170 green businesses signed a letter to the prime minister, drafted by the Renewable Energy Association, calling for a public declaration of support for green energy and a resolution of the uncertainty that surrounds government plans for renewable power subsidies.

The signatories include Frances O’Grady, deputy secretary general of the TUC, Sir Tim Smit of the Eden Project, and Penny Shepherd, chief executive of the Sustainable Investment and Finance Association of investors, as well as veteran green campaigners Jonathon Porritt and Tony Juniper, adviser to Prince Charles.

They are worried that recent government U-turns on support for renewables are putting off much-needed investment in the sector. They point to the recent decision on future subsidies, which was long delayed and left significant issues unresolved so creating uncertainty for investors. For instance, although offshore wind subsidies are now clear until 2017, those for onshore wind face another review, and solar subsidies are likely to be reviewed again next year. This was confusing and scaring off financial backers for renewable energy projects, they said.

The letter to Cameron invoked the Olympic spirit. It : “We urgently need you to deliver a united ‘Team GB’ effort to secure the UK’s place as a world leader in green skilled jobs and technology. Massive investment in renewable energy is taking place across Europe and Asia and the UK cannot afford to miss out – neither can we afford to miss our carbon targets.”

Martin Wright, chairman of the Renewable Energy Association, said: “Renewables must not be treated like a political football, kicked between the Department of Energy and Climate Change and the Treasury. Government shouldn’t squander this once in a generation opportunity to transform our energy system into one fit for the future, with all the jobs and inward investment this will bring.”

The signatories also referred to recent high-profile rows within the cabinet over the future of renewables. Aides to chancellor George Osborne have been briefing heavily that he wants to see more investment in gas-fired power generation, even though it is a fossil fuel with a highly volatile price.

The high cost of gas has been the biggest factor behind energy price rises in recent years, according to the government’s analysis. But Osborne believes that potential investors in gas will be put off by support for renewables – even though more than 10GW of new gas-fired generation is already in the advanced stages of planning or, in some cases, construction.

In a speech to potential overseas investors in UK energy on Tuesday, the chancellor failed to mention green energy at all, but praised oil and gas, pledging that gas would continue to be the UK’s biggest source of energy into the 2020s and beyond. He said: “There is no better example of the significant contribution that [the energy] sector makes to our economy than the UK oil and gas industry. This has long been one of our great industrial success stories.”

A recent survey by the Climate Institute found 81 per cent of respondents placed solar power within their top three preferred energy options and two-thirds placed coal in their least preferred three.

Climate of the Nation 2012 measures Australian attitudes to climate change, related policies and solutions in mid-2012.

A couple of things are clear from the survey according to the Climate Institute: “Australians are sick of the politics and scared about rising costs of living”.

Clear also is Australians’ passion for solar energy. While solar was among the top three energy options for 81 per cent of respondents, wind was the second most preferred option with 59 per cent and hydro, 44 per cent.

Solar power was the most popular energy choice in all states, with the highest number of most preferred votes in Western Australia (88 per cent), followed by South Australia, Queensland and Victoria (each at 82 per cent), and New South Wales (75 per cent).

While 28 per cent placed gas within the top three most preferred sources, for 31 per cent it was slung in the three least preferred energy options.

Two-thirds placed coal in their least preferred three, just a whisker more than nuclear at 64 per cent.

76 per cent of respondents stated increasing the amount of renewable energy in Australia’s energy mix was the most effective greenhouse gas emission reduction policy.

“..Australians’ vision for a low-carbon future is one that taps into the nation’s abundant renewable energy resource,” said John Connor, CEO of The Climate Institute.

The Climate Institute has conducted comprehensive quantitative and qualitative research into Australian attitudes to climate change and its solutions since 2007.

With two significant reductions in the feed-in tariffs for commercial systems taking place within the last twelve months, it’s understandable that the UK industry is taking stock of what has occurred. It’s obvious now that the government incentives introduced for commercial solar power were too generous to sustain. It’s also becoming increasingly evident that the Department of Energy and Climate Change(DECC) will use its power to swiftly alter government incentives when they deem necessary. What needs to be contemplated forwards from this is that with an experienced and industry conscious awareness commercial solar power can still establish viability in the UK. This article will explain why.

Utilising the economies of scale and potentially significant savings that companies and business owners can make on their energy usage, the commercial market holds a great deal of potential for investors. There are nuances to consider however, and the handling of the feed-in tariff incentives by the UK Government has not added to the security of the prospect for many people. This does not mean that potential projects have become more risk than their worth, it simply means that project management must protect investments using the lessons of the past and innovations of the future to minimise risk and maximise gain. Sound like a familiar set of circumstances for most kinds of investment? It is, so let’s analyse this in greater detail.

The Current State of Commercial Solar Incentives

Feed-in Tariffs

All information provided in this article is based on the proposed changes to the feed-in tariff, outlined on the DECC website here.

There are two purely financial benefits that arise from the feed-in tariffs.

1. The ‘Generation Tariff’ is paid for every kWh generated by an eligible system whether it is used on site or exported to the grid. The proposed new rates are:

Tariff for >4-10kW PV installs = 16.8p/kWh (in year one*)

Tariff for >10-50kW PV installs = 15.2p/kWh*

Tariff for >50kW – 150kW = 12.9p/kWh*

Tariff for >150kW – 250kW = 12.9p/kWh*

Tariff for >250kW – 5MW = 8.5p/kWh*

*This rate will only apply for the first year of the systems operation. It will then increase based on the Retail Price Index’s (RPI) inflation over it’s 25 year lifespan.

2. The second aspect is the ‘Export tariff’, and this remains unchanged from the DECC proposals. It is a flat rate of 3 pence per kWh generated from an eligible system, unused on site and sent onto the grid.

Energy Savings

The third benefit that comes directly from generating solar energy from a system concerns the energy usage and bills on site. Earnings can be significant, and are established when property owners compare the new tariff rates with current bills. The rise of energy prices make this aspect of clear benefit, and just as importantly more effective the sooner the installation is carried out.

The ‘Energy Bill Savings’ are calculations on what the cost would have been to buy a kWh from the grid when it is instead generated from the solar power system and used on site. More complicated to calculate because it relies upon an analysis of the tariff times and rates of the properties energy bills, a Solar Selections Commercial Broker is trained to assist customers with establishing these figures and their influence on rates of return.

There are also a number of environmental, corporate image and sustainability benefits that are associated. Solar Selections Commercial designs projects that take into account these goals and provides suggestions for how to maximise their impact on the installation. It’s case specific, and again best discussed with your project managing broker.

Primary Areas of Development and Potential

Finance

The reality of many investment opportunities is that they are often capitalised upon during unexpected times. So long as the commodity in question is deemed to be a) increasing in value, b) possessive of a rare quality and c) stable, investment will find it and want to share in the profits. Commercial solar power is an investment in renewable energy, and all three aspects are most definitely upheld by this commodity. Renewable energy is considered a viable investment in the world today, and this is upheld despite the tariff changes in the UK.

For these reasons, private investment is expected to come into focus for the commercial market here moving into 2012. Through conglomerates and syndicates lines of capital are being opened up across the UK for these projects, through firms such as Solar Selections. These lines of capital will come into play as soon as the appropriate figures regarding returns on investment are established. So let’s look at some ideas on how this can happen.

Suggestions

First of all, the price per watt of solar components needs to continue to be driven down. In the UK we have excellent prices considering our almost complete lack of onshore manufacturing and assembly plants, but more can be done. One stigma that immediately needs to be overcome is the focus towards brand name solar products, especially on panels. Distributors and importers alike need to develop more robust relationships with the largest manufacturers in the world such as Suntech, Trina, JA Solar, Yingli and First Solar and educate their customers on the technical differences and advantages on these modules. Moreover, the public need to be educated on the differences between panel brands in a more objective manner.

Secondly, finance when sourced for large scale solar installations needs to become more comprehensively advantageous to business. Zero upfront capital outlay, tax benefits and perpetually positive cash flow positions are a small number of unique approaches as yet unexplored by the mainstream finance market; see our full article for further details. Solar Selections Commercial is in the process of introducing an exclusive package currently operating in our other countries for our clients that addresses these points and many more benefits. We encourage interested parties to contact our commercial management team for further information.

Finally, there are the more generalised energy efficiency and sustainability overhaul approaches to commercial properties that are to be more widely and professionally used. This involves considering a complete energy efficiency upgrade plan for a property with solar energy merely one aspect among a wide range of implementations to be considered. By way of example this may include installing energy efficient/motion activated lighting and monitors, condensing CPU and modem hardware into micro-managed energy efficient hardware and software, advanced telecommunication and video link software to curb travel and conference logistic costs and simpler measures such as anti-draft stoppers under doors or power point energy savers. Considering the DECC’s proposals regarding implementation of Environmental Performance Certificates (EPC) into eligibility for the solar feed-in tariffs, such practices may indeed become necessary for solar projects with the coming of 2012.

EPC’sare essentially a summary of a property’s energy efficiency and carbon dioxide emissions. They are used as ratings for all properties bought, sold or rented in the UK. The DECC’s suggestions have centred around only allowing properties with certain minimum EPC ratings to be eligible for solar FiT’s, effectively closing off the tariffs to properties judged too inefficient.

Once again, Solar Selections will be at the forefront of this approach offering options from our network of energy management consultancy firms to our clients that comprehensively address energy efficiency and emission standards.

Conclusion

A midst the controversy and decisive nature of the UK government’s cuts to the solar feed-in tariffs last year, the truth of the matter is that it has been the most successful 12 months in the solar industry’s history. The Commercial solar industry has experienced only a glimpse of it’s true potential, and whilst it is hard for some installers and potential investors to see right now, the sector has its best years ahead of it. By developing and utilising proven approaches to aspects such as finance, energy use reduction and energy efficiency, feasibility will be re-established and become accessible to many thousands of business owners and investors. The international examples are there for all to see, and with the exciting development of prospects such as our Operational Lease arrangement, Solar Selections will be at the helm of the budding commercial solar industry of 2012 and beyond.